At the core of success
Things are looking up in mineral exploration, with 2017
budgets robust and further increases expected this year.
This all filters down to those offering innovations in
exploration technologies and solutions, reports Paul Moore
he non-ferrous mining exploration sector
has shrugged off its recent protracted
downturn, with analysis by S&P Global
Market Intelligence showing a rise in
exploration budgets of more than 14% year over
year to $7.95 billion in 2017 — the first increase
in the annual global non-ferrous exploration
budget since 2012. Key highlights include:
n 2017 global non-ferrous exploration budget
records first increase since 2012, up more
than 14% year on year
n Budgets expected to rise again in 2018
n Gold leads charge, zinc makes notable
recovery
n LatAm remains top attraction
n Industry remains risk averse, focusing on
near-mine opportunities
According to the 28th edition of Corporate
Exploration Strategies (CES) by S&P Global
Market Intelligence, this reversal of the near
five-year downturn is being led by a robust gold
sector, whose activity began picking up in mid-
2016. Gold budgets for 2017 exploration were up
22% year over year. Zinc-focused producers and
junior explorers also boosted the zinc budget by
29% year over year to $489 million, based on
improved zinc prices since early 2016, according
to the CES report.
T
28 International Mining | FEBRUARY 2018
S&P Global Market Intelligence’s 2017
exploration data and analysis are based on
information collected from almost 3,500 mining
and exploration companies worldwide, of which
more than 1,500 had exploration budgets for
2017. The companies (each budgeting at least
$100,000) budgeted a total of $7.95 billion for
nonferrous exploration in 2017. Including an
estimate for budgets that could not be obtained,
the 2017 worldwide exploration budget totalled
$8.5 billion.
Since mid-2016, the mining sector has
gradually improved in attractiveness as an
investment option. An uptick in financing levels
for miners over the past 18 months [to October
2017] — especially among the junior explorers
— was driven by improved market conditions
and stronger metals prices.
Associate Director of Research, Metals &
Mining at S&P Global Market Intelligence, Mark
Ferguson says: “We know that the juniors have
endured the worst of the downturn since 2012,
accounting for most of the 40% drop in the
number of active explorers over the past five
years. However, the new CES budget data
indicate that, among all company types, the
surviving juniors are making a strong comeback
in 2017; they have increased their aggregate
Efficient and economical on shallow hole
drilling, or deeper with up to 1,800 m of NQ™
capacity, the Boart Longyear LF160 meets the
demands of most diamond coring projects
exploration budget by 23% year over year,
including a 41% increase in gold-only
allocations.”
The CES report highlights that major
producing companies had also increased their
budgets in 2017, allocating 17% more for
exploration than in 2016. As a group, the majors
still dominated the exploration sector’s efforts
with almost 54% of the global budget, despite a
faster rat e of growth among the pure junior
explorers.
Ferguson adds: “We expect both of these
groups, which collectively account for more than
80% of global exploration budgets, to continue
increasing their exploration efforts well into
2018. Sustained market interest will likely
benefit juniors the most, allowing their
aggregate budget to grow at a faster pace than
the producers’ budget. As the industry rebound
gains traction, we expect a similar pace of
increases in 2018 budgets.”
Regionally, Latin America remains the biggest
draw for exploration efforts, with the region’s
aggregate budget increasing 20% year over year
to almost $2.4 billion in 2017.
Elsewhere, a diverse region encompassing
Europe and most of mainland Asia remains the
second most attractive, drawing in 9% more
allocations than in 2016, followed by Canada,
MINERAL EXPLORATION